According to the Canadian Anti-Fraud Centre, the number of rental scams reported in 2017 was 210, with 102 victims and a total financial loss of more than $145,000. That’s up from 137 reports in 2015, with 49 victims and a total financial loss of slightly more than $72,000. Still, the CAFC estimates that fewer than 5 per cent of victims report their losses. (Gutesa/Shutterstock)

‘Poseur’ landlords target newcomers who need accommodation fast and who are willing to pay upfront

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If it seems too good to be true, it likely is. That’s the message to new Canadians on the hunt for rental properties, particularly in competitive big city markets, like Toronto and Vancouver.

“[It’s] one of the red flags we often discuss in reference to this (type of) scam,” says Lisanne Roy Beauchamp, the Canadian Anti-Fraud Centre’s (CAFC) call centre operations supervisor.

Next? Do your research and know the market, including average rental prices and houses that are up for sale, as fraudsters may mirror them as rentals. Extra vigilance is essential when you’re looking for housing in a new place, where landlord/tenant rules may differ, and the housing market contrasts, what you’re used to back home.

“It’s important for consumers to know the local market, so that they may identify something that doesn’t seem quite right,” Roy Beauchamp says.

Despite the warnings, housing rental scams continue to make headlines, and are most common in areas with student housing (particularly in university cities such as Ottawa, Waterloo and Kingston), a high volume of condos and renter-centric neighbourhoods.

“People specifically try to scam these folks, lurking and hovering on those sites and targeting that demographic.”

Just last week, police arrested and charged a man who allegedly listed advertisements between September 2017 and June on condos he did not own in Toronto and Mississauga, the Toronto Star reported. He met with would-be tenants, who signed leases and handed over cash deposits. Goran Drozdek, 34, faces 36 charges, including nine counts of fraud.

Earlier this month, Toronto’s CityNews reported that more than two dozen people, many of them international students or newcomers, are out thousands of dollars after paying upfront for housing in a North York detached home, listed on Kijiji and Facebook. The landlord went MIA, with most of the to-be tenants never setting foot inside the Toronto property.

And, Global News reported that a B.C. woman allegedly had the property rental ad she posted to Kijiji stolen and listed on Craigslist at a cheaper price. She said that several tenants, many of whom had already sent damage deposits or first month’s rent to the scammer, showed up at her address. She reported the incident to the RCMP but was told there was little that could be done to track down the perpetrator.

“People specifically try to scam these folks, lurking and hovering on those sites and targeting that demographic,” explains Geordie Dent, executive director of the Federation of Metro Tenants’ Associations. “Some superintendents or property managers will pick on newcomer tenants … because they are banking on the fact that the newcomer won’t know the law.”

New Canadians are a prime target for dicey landlords and property scammers, not only because they are unfamiliar with the market and laws, but also because they are often more pressed to find housing; prepared to hand over funds to secure a place before seeing it, meeting the landlord, or even arriving in country; may not understand their privacy rights; and are overly trusting when offered a helping hand.

“Really, the best way to ensure this stuff doesn’t happen is by tackling the vacancy rate.”

“Newcomers generally face a couple of problems when coming to rent in Toronto,” explains Dent. “The rental market is really hot, so it’s prone to a lot of abuse for a lot of people.”

These abuses, Dent says, include requesting illegal rent, security and damage deposits upfront; demanding illegal information (such as a SIN or passport numbers), which violate privacy rights; and placing limits on how many people can live in a dwelling.

“Really, the best way to ensure this stuff doesn’t happen is by tackling the vacancy rate,” Dent says. “It’s very low … this makes people vulnerable to scams. If you are desperate to find something, you are more likely to send money.”

According to the CAFC, the number of rental scams reported in 2017 was 210, with 102 victims and a total financial loss of more than $145,000. That’s up from 137 reports in 2015, with 49 victims and a total financial loss of slightly more than $72,000. Still, the CAFC estimates that fewer than 5 per cent of victims report their losses.

“[Reporting incidents] makes it easier to locate trends and shifts in current scams. As a result, the CAFC and other organizations can adapt their preventative and educational resources,” encourages Roy Beauchamp. “It helps the greater good and prevents further victimization.”

Bringing perpetrators to justice has its own set of challenges, particularly in a digital world. Poseur landlords or real estate agents will disappear and halt all communication with hopeful tenants, and falsely identify themselves or remain anonymous. The listings they post may be cross-posted to multiple sites using fake photos (from houses up for sale) as well as conflicting or wrong addresses and contact info (email addresses and phone numbers, which can be easily deactivated). Money transfers, usually wired instead of sent via a financial institution, are also difficult to track, leaving the onus on the victim.

“In many cases, the money is withdrawn by the fraudster as soon as the funds are sent,” says Roy Beauchamp. “The victim is found responsible for the loss, as the funds were sent willingly and the consumer is expected to do their due diligence.”

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Warning signs and ways to protect yourself

1. Rent is cheaper than the market rate or other houses/units in the area.

2. Landlord requires payment in cash or through a wire transfer.

3. Landlord requests large amount of money, or multiple months’ rent in advance, to secure the place.

4. Request for deposit (on rent, security or damage), without any agreement in place or from a landlord that is outside the country.

5. Landlord is not available to personally show you the unit.

6. You are offered a space without any background check (i.e. credit check).

7. Ads that show the outside of the property only, or photos that don’t match the property seen.

8. Ads are posted on multiple sites with different contact info.

9. You send an email inquiry, and are directed to a page requesting personal and/or financial info.

AVOID A RENTAL SCAM BY:

1. Searching online for the house or building’s address to find anything fishy or surprising.

2. Carefully reading your rental agreement or other papers you must sign, including any fine print.

3. Seeing the unit in person, with the landlord/property manager you have been in contact with, and inquire about the history of unit you are viewing (question neighbours).

4. Never handing over cash, wire or send any money, without meeting the landlord and seeing the unit in person.

5. Knowing your rights. Do not hand over personal information such as banking info, SIN number, passport number, etc. The only thing a landlord should need to check is your credit, but they do not need those details to do so.

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About the Author

Sophie Nicholls Jones

Sophie Nicholls Jones is a Toronto-based digital producer for CPA Canada. With more than a decade of journalism experience, Sophie is a seasoned reporter, writer and editor, with a focus on the business and financial sectors.